Brexit: EU launches legal challenge against UK over wind farm subsidies

Not the time to be ‘fighting this out in court’, says Whitehall official

UK and EU in dispute over post-Brexit subsidies (PA)

The EU has launched a legal challenge against the UK over offshore wind farm subsidies – sending a formal complaint to the World Trade Organisation (WTO) for the first time since Brexit.

The European Commission claims new criteria brought in by Boris Johnson’s government related to offshore wind projects breaks agreed subsidy rules.

Brussels told the WTO that the change means the UK is now favouring British companies using domestically-sourced wind turbines – rather the imported “content” – when it comes to subsidies.

“This violates the WTO’s core tenet that imports must be able to compete on an equal footing with domestic products and harms EU suppliers,” the Commission stated.

British officials were said to be puzzled at the timing of the move. “At a time when the West should be united in defeating Putin, this act of envy by Brussels is ill-judged and ill-timed,” a Whitehall source told the Financial Times.

They added: “We should be working together to strengthen European clean energy security – not fighting this out in court.”

“Our policies to boost Britain’s offshore wind industry are comparable to many other schemes in the EU, so we are puzzled why Brussels are challenging our scheme when they do pretty much the same.”

The UK government said it would “rigorously contest” the EU challenge. The two sides have two months to reach an agreement on before the EU decides whether to ask the WTO for an arbitration panel.

The row comes as the two sides remain at loggerheads over the Northern Ireland Protocol, with foreign secretary Liz Truss insisting that a suspension of agree trade arrangements for the province remains on the table.

The UK also faces a hefty fine over a European court ruling that found the British government was negligent in allowing EU markets to be flooded with cheap Chinese-made clothes and shoes.

The European Court of Justice found that Britain “failed to fulfil its obligations” on customs controls while an EU member by failing to “combat fraud” on footwear and textiles.

Meanwhile, the director of the leading international affairs think tank Chatham House urged Mr Johnson’s government UK government to use its leading role in the Ukraine crisis to repair relations with the EU.

“A more specific UK–EU dialogue on security could also emerge from the Russia–Ukraine crisis,” said Dr Robin Niblet, suggested London and Brussels could work more formally on defence areas such as cyber, intelligence and disinformation.

Dr Niblet warned that the ongoing impasses over the protocol and other trade disputes could thwart the opportunity to worth together on more “critical” matters.

“The risk remains that allowing these areas of dispute and friction in the economic sphere to persist, and possibly fester, will undermine both sides’ desire to forge a closer relationship on foreign and security policy – as is now even more critical,” he said.

Ms Truss suggested at the weekend that the Ukraine crisis had put the protocol dispute in perspective. “The scale of the issue that we’re facing with Russia is so big, it’s so important, it’s so vital that we all stick together,” she told the Sunday Telegraph.

The foreign secretary said the option of triggering Article 16 and suspending parts of the protocol remained an option, but added: “I am working to fix it as a matter of urgency.”